Rogers 2011 Annual Report Download - page 128

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(c) Subsidiaries and joint ventures:
The following are the significant subsidiaries and joint ventures of the Company:
Ownership interest
Jurisdiction of
incorporation December 31, 2011 December 31, 2010 January 1, 2010
Subsidiaries:
Rogers Holdings Inc. Canada 100%100% 100%
Rogers Media Inc. Canada 100%100% 100%
FIDO Solutions Inc. Canada 100%100% 100%
Rogers Wireless Alberta Inc. Canada –100% 100%
Rogers Communications Partnership Canada 100%100% –
Rogers Broadcasting Limited Canada 100%100% 100%
Rogers Publishing Limited Canada 100%100% 100%
Blue Jays Holdco Inc. Canada 100%100% 100%
Joint ventures:
Inukshuk Wireless Inc. Canada 50%50% 50%
Dome Productions Inc. Canada 50%50% 50%
The annual financial statement reporting period of the Company is
the same as the annual financial statement reporting periods of all its
subsidiaries and joint ventures. There are no significant restrictions on
the ability of subsidiaries, joint ventures and associates to transfer
funds to the Company in the form of cash dividends or to repay loans
or advances.
The following business transactions were carried out with the
Company’s joint ventures and associates. Transactions between the
Company and its subsidiaries have been eliminated on consolidation
and are not disclosed in this note.
Transaction value
2011 2010
Revenue:
Joint ventures and associates – Rent, parking,
interconnect fees $1$–
Purchases:
Joint ventures and associates – Network access
fees 12 13
Access fees paid to broadcasters 17 16
Production fees 20 14
License fees and service obligation 21
The sales to and purchases from the Company’s joint ventures and
associates are made at terms equivalent to those that prevail in arm’s
length transactions. Outstanding balances at the year-end are
unsecured, interest free and settlement occurs in cash. The
outstanding balances with these related parties relating to similar
business transactions as at December 31, 2011 was $5 million
(December 31, 2010 – $4 million; January 1, 2010 – $4 million).
25. COMMITMENTS:
(a) The Company is committed, under the terms of its licences issued
by Industry Canada, to spend 2% of certain wireless revenues
earned in each year on research and development activities.
(b) The Company enters into agreements with suppliers to provide
services and products that include minimum spend
commitments. The Company has agreements with certain
telephone companies that guarantee the long-term supply of
network facilities and agreements relating to the operations and
maintenance of the network.
(c) In the ordinary course of business and in addition to the
amounts recorded on the consolidated statements of financial
position and disclosed elsewhere in the notes, the Company has
entered into agreements to acquire broadcasting rights to
programs and films over the next five years at a total cost of
approximately $950 million. In addition, the Company has
commitments to pay access fees over the next year totalling
approximately $15 million.
(d) Pursuant to CRTC regulation, the Company is required to make
contributions to the Canadian Media Fund (“CMF”) and the
Local Programming Improvement Fund (“LPIF”), which are cable
industry funds designed to foster the production of Canadian
television programming. These contributions are based on a
formula, including gross broadcast revenue and the number of
subscribers. With respect to CMF, the Company may elect to
spend a portion of the above amount determined by the
aforementioned formula for local television programming and
may also elect to contribute a portion to another CRTC-approved
independent production fund. The Company estimates that its
total contribution for 2012 will amount to approximately
$74 million.
(e) Pursuant to CRTC regulations, the Company is required to pay
certain telecom contribution fees. These fees are based on a
formula including certain types of revenue, including the
majority of wireless revenue. The Company estimates that these
fees for 2012 will amount to approximately $27 million.
(f) Pursuant to Industry Canada regulations, the Company is
required to pay certain fees for the use of its licenced radio
spectrum. These fees are primarily based on the bandwidth and
population covered by the spectrum licence. The Company
estimates that these fees for 2012 will amount to $107 million.
(g) In addition to the items listed above, the future minimum lease
payments under operating leases for the rental of premises,
distribution facilities, equipment and microwave towers,
commitments for player contracts, purchase obligations and
other contracts at December 31, 2011 are as follows:
Within one year $ 742
After one but not more than five years 1,467
More than five years 159
$ 2,368
Rent expense for 2011 amounted to $172 million (2010 – $180 million).
124 ROGERS COMMUNICATIONS INC. 2011 ANNUAL REPORT